Use the following information to prepare a Statement of Cash Flow Accounting Report. The indirect method should be used to find cash flow from operations.

ABC Corporation retails specialty chairs for individuals who like to change sitting positions rather frequently. ABC has been particularly profitable in recent years with the increased amount of time individuals spend at the PC keyboard. The balance sheet accounts for ABC as of December 31, 2006 and December 31, 2005 are presented below. Other information related to 2006 activities is also provided:

Net Income for 2006 was $750,000
Cash Dividends of $300,000 were declared and paid in 2006.
A plant asset with an original cost of $500,000 and having a book value of $180,000, was sold in 2006 for $180,000.
A long-term investment was sold in 2006 for $160,000. There were no other transactions affecting long-term investments during 2006.
10,000 shares of common stock were issued in 2006 for $25 per share.

Management of ABC is interested in seeing a statement showing the amount of cash flow from operations, cash flow related to investment activities, and cash flow associated with financing activities.

Solution Summary

This solution explains how to prepare a statement of cash flow accounting.